Full text of Mimeograph Letters and Statements of the Board : Letter From Asst. Secretary Bethea re Ruling on Section 5136 of Revised Statutes That Obligations of Commodity Credit Corporations, etc., Are Considered Exempted Securities, Number S-223, Volume 52, Page 330

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330
BOARD OF G O V E R N O R S
OF THE

6@

FEDERAL RESERVE SYSTEM

S-223
Sec. 5136 R.S.-16

WASHINGTON
ADDRESS

a-

OFFICIAL C O R R E S P O N D E N C E
TO THE

*******

BOARD

June 11, 1940.

Dear Sir:
The Board of Governors recently received an inquiry with
regard to the amount of obligations of the Commodity Credit Corporation, the Reconstruction Finance Corporation, the United States
Housing Authority, and the Federal Intermediate Credit Banks which
may be held by a member bank of the Federal Reserve System. The
following is an excerpt from the Board's reply to the inquiry:
"As you know, under the provisions of the Federal
Reserve Act, State member banks are subject to the same
limitations and conditions with respect to the purchasing, selling, underwriting and holding of investment
securities and stock as are applicable in case of national banks under section 5136 of the United States
Revised Statutes. The latter section provides that the
limitations and restrictions therein contained as to
dealing in, underwriting and purchasing investment securities by a national bank for its own account shall
not apply to obligations of the United States and certain other types of obligations specifically mentioned.
We are advised by the office of the Comptroller of the
Currency that obligations of the Commodity Credit Corporation, the Reconstruction Finance Corporation, and
the United States Housing Authority in the form of investment securities which, in accordance with law, are
unconditionally guaranteed as to principal and interest
by the United States, are considered by the office of
the Comptroller as 1 exempted securities'. Accordingly,
a national bank or a State member bank may purchase
such obligations for its own account without regard to
the limitations and restrictions of section 5136, United
States Revised Statutes.
"Debentures of the Federal Intermediate Credit
Banks are obligations issued under the authority of the




331

S-223
5136 R.S.-16

Federal Farm Loan Act, as amended, and therefore are also
1
exempted securities1 by reason of the specific provisions
of section 5136, United States Revised Statutes."
Very truly yours,

L. P. Bethea,
Assistant Secretary.

TO THE PRESIDENTS OF ALL FEDERAL RESERVE BANKS